You have been asked by the accountant at Playfum Ltd whether the following items should be recorded as assets, liabilities, equity, income or expenses. Use Framework 2014 to prepare a response to the accountant's enquiry Give reasons for your advise (a) The company provides an annual recreation leave entitlement of 20 days to its employees. If an employee does not take any of the entitlement in a particular year, it is carried forward to following years.

(b) Playfurn has entered into a contract with Clayton Metal Manufacturers to purchase capital equipment at a cost of $1 million. Playfurn has paid a 10% deposit. (c) Playfurn has the following equity: Share capital: 20 million ordinary shares $2000000 5 million redeemable preference shares $5000000 Retained earnings $3500000 Taking advantage of the Corporations Act, which allows companies to buy back their own shares, the company has bought back 10% of its ordinary share capital at $1.50 per share (d) Playfurn has a regular program of maintaining its plant and equipment. To provide for this program it has established a Provision for Plant Maintenance account which the company shows with other provisions in the statement of financial position (e) The preference shares on issue (see point (c)) are non-participating, cumulative and redeemable. The accountant believes that the shares should be shown as a liability in the statement of financial position rather than as part of equity.